Business Growth Agenda: Building Natural Resources Progress ReportEnergy and Resources
We are very fortunate in New Zealand to have an abundance of energy and minerals resources.
These provide us with unique opportunities to grow our economy, ensure we have a secure supply of affordable energy, and respond to the global challenge of climate change.
The oil and gas sector is already a major contributor to our economy. It’s our fourth-largest export and directly and indirectly supports around 7,700 jobs.
The sector has invested $7 billion here in the past five years and has contributed $2.5 to our economy in the three years to 2011 in taxes and royalties. Obviously it has the potential to be a major driver of growth for the future.
As significant as these figures are, as you know, New Zealand’s oil and gas production, and its associated economic benefits, are currently generated from just one basin: Taranaki.
Yet New Zealand has 18 petroleum basins.
At present the country is lightly explored, but, based on scientific information, more regional success stories are highly possible.
A recent Government study found that our total GDP could grow by an average of $2.1 billion or 1.7% for each year of a 30-year development of a second basin, and create another 5,500 jobs.
The Government has a critical role to play in ensuring that we realise this potential while protecting our environment and our people.
The move to exclusive use of an annual block offer for oil and gas exploration is one of the steps the Government is taking to strengthen management of oil and gas resources.
This year's permitting round is the first under this new approach - with opportunities tendered in a number of basins.
Later this morning I will be announcing the outcome of Block Offer 2012 and awarding successful bidders their permits.
The outcome is better than we ever expected although we were well aware of the interest registered.
The strong interest in Block Offer 2012 proves that New Zealand is a serious investment destination for oil and gas explorers.
A robust evaluation process has ensured we have the best operators with the best work programmes. Of the 23 blocks on offer 13 were bid on with 24 proposals - it was very competitive. We have accepted 10.
Block Offer 2012 has been a success that we expect to repeat in 2013 and annually thereafter. This summer is rather quiet but 2014 will be the busiest ever, and 2015 after that.
We are committed to ensuring that the risks to the environment and our people are managed responsibly. For example, the Crown Minerals (Permitting and Crown Land) Bill strengthens health, safety and environmental controls at the outset.
Our extensive renewable energy resources will also be an important source of economic growth in the future, as businesses capitalise on selling goods produced using energy sources with a low carbon footprint.
Renewables offer a win-win – providing a source of economic growth and energy while at the same time reducing our greenhouse gas emissions and making New Zealand more resilient in the face of fluctuating commodity prices.
While the Government can facilitate the transition to low-carbon energy sources, jobs are always in the front of our minds. That is why, during the transition, that it is important that we make the most of our mineral, and oil and gas resources.
As New Zealanders, we’re very lucky to have so many opportunities to grow our economy and provide a secure supply of affordable energy.